Adam Tooze teaches history at Columbia and is the author, most recently, of The Deluge: The Great War and the Remaking of Global Order 1916-31. He is writing a history of the fallout from the financial crisis of 2008.

After the Wars

Adam Tooze

Wolfgang Schäuble can’t have expected an easy ride when he moved from Germany’s Interior Ministry to its Finance Ministry on 28 October 2009. Angela Merkel’s new coalition with the Free Democratic Party (FDP), the free market Liberals, was committed to reducing the government deficit. That summer the preceding Grand Coalition – the name for a coalition involving Germany’s two largest parties, the Christian Democratic Union (CDU) and the Social Democratic Party (SPD) – had made use of its large majority to write a self-denying debt brake into the German constitution. If Berlin was to regain fiscal credibility, it needed to reverse the huge deficits run up during the financial crisis. Merkel’s new finance minister would have to rein in the financial demands of the Christian Democrats’ supporters as well as the tax-cutting ambitions of their Liberal partners. Schäuble was chosen because of his track record as a ruthless CDU powerbroker, a pivotal figure in German politics since the 1980s. But no one can have anticipated the centrality he would have in the Eurozone crisis, culminating in the brutal showdown with Greece in July this year. With good reason, Schäuble has come to be seen as responsible for blocking the transformative vision offered by Syriza.

There is profound disagreement about what is actually good for corporate Europe. The most articulate defenders of profit-driven growth in the Anglosphere find Schäuble’s willingness to risk deflation in pursuit of fiscal balance incomprehensible. At the height of the crisis in 2011-12 fixers such as Timothy Geithner, the US Treasury Secretary, fumed at the fundamentalist fiscal conservatism of Frankfurt and Berlin. In November 2010 Schäuble replied in kind, dismissing Ben Bernanke’s Quantitative Easing 2 as ‘clueless’. Meanwhile, Germany’s corporate giants such as Deutsche Bank can barely disguise their relief at the more expansive course being followed by the European Central Bank under Mario Draghi in the face of protests from Schäuble and his allies at the Bundesbank.

Perhaps Schäuble is merely pandering to the conservative constituency in Germany. Often seen as a figurehead of post-democracy, he is in fact a loyal party politician determined to assert Christian Democracy as not just Germany’s but Europe’s natural party of government. Keeping Springer’s populist tabloid, Bild, on side is essential. The dogged defence of fiscal discipline against the backsliding of the ‘lazy Greeks’ is popular well beyond the CDU base. Since Merkel’s approval rating slumped following her generous offer to relax the rules on accepting refugees, Schäuble has surged ahead in the polls. And if data from the Pew Research Center are to be believed, he is popular not just in Germany but across much of Northern Europe.

But we underestimate the German finance minister if we see him merely as a tight-fisted Swabian vote-getter. Schäuble is not a post-ideological figure in the mode of Merkel or her predecessor as chancellor, Gerhard Schröder. He is a conviction politician, a man of ideas. As such, it’s tempting to say that he belongs to an earlier era. It would be more precise, in fact, to say that he belongs to two earlier moments. His Christian conservatism dates from the early Cold War, warmed over by the neoconservative revival of the 1980s for which Helmut Kohl was the battering ram. The social market economy is for Schäuble not simply an economic policy option but the social form most appropriate to humanity, in its fallibility and selfishness and restless desire for freedom.

In 1989 when some combination of democracy and capitalism triumphed across Central and Eastern Europe, it was Schäuble as Kohl’s chief of staff and interior minister who negotiated East Germany’s accession to the Federal Republic. He likes to remind his audiences how many in the old West Germany wrote off any possibility of reunification, until they were proved wrong by ‘naive’ anti-communist activists. For Schäuble 1989 brought not the end of history, as Fukuyama claimed, but the restart of history. With it many of the comfortable simplicities of the old Federal Republic disappeared. There is no way back to the ‘familiar’ old days, which were, as he reminds West German audiences, framed by the threat of nuclear annihilation. Though reunification was the great landmark of his career, Schäuble does not deny that it came at the price of wrenching transformation and huge social costs in the East. But he has confidence in the mission of the West: ‘The West has faced its challenges. Again and again.’ Schäuble’s ultimate source of optimism is the spiritual history of Europe. ‘The Reformation, already, was an answer to the search for orientation in uncertain times at the end of the Middle Ages,’ he said last year. ‘Luther found an anchor in the freedom of Christian humanity. The West again and again draws on this strength, to face the unchained forces that threaten our freedom, our understanding of self-determination and human rights.’

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